Labour’s disgraceful greenhouse gas polluter backdown

I’ve been fuming for the last couple of days about National yet again watering down the Emissions Trading Scheme.

But today, I’m even angrier. But with Labour, not with National. Today, Labour’s Climate Change spokesperson, David Parker, released this media statement. The headline looked good, most of the rhetoric castigated National’s position, but buried in the middle of the release was this statement:

Although Labour believes National’s approach to industrial emissions is imperfect, we are willing to go along with it due to the desirability of settling across both main parties.

When Labour were in government, they were not prepared to give any concession to the Greens to strengthen their weak Emissions Trading Scheme.  But now, in opposition, Labour are prepared to cozy up to yet another National Party proposal to further subsidise greenhouse gas polluters, purportedly in the interest of “unity and certainty”.

Meanwhile, it is you and me as taxpayers who pay for this, rather than the polluters.

If there is ever a reason to vote Green rather than Labour or National on November 26, this has to be it.

It’s time to dump the ETS

The current public debate over the relative merits of Labour’s emissions trading scheme (ETS) and National’s scheme is not getting us anywhere. We’re arguing about the difference between quite useless and rather useless.

Because the fact is, as a means to address climate change by reducing greenhouse gas emissions, the ETS approach is wholly ineffective. And not only is it ineffective, it is unjust as well.

The climate crisis we face is of such a scale that we can’t afford to wait years for empirical data to show us that ETSs are fatally flawed. We have to break out of the ETS mindset right now. So, what I’ve done here is describe some of the problems with ETSs in the hope that it clears the space for another debate to begin – what approach will actually make real and just progress on reducing greenhouse gas emissions.

There is a lot of analysis of the weaknesses of ETSs around the web and some of the best comes from Larry Lohmann (here).

Some of his observations are as follows:

1. Emissions markets do not encourage the development of low or zero emission technology. The market focus on economic efficiency dictates that the purchase of permits will be preferred to expenditure on research and development, structural shifts in public investment, redirection of subsidies away from fossil fuels, and other measures.

2. The science, technology and enforcement required for an extensive emissions trading scheme is not available, even in industrialized countries. That opens the way for Enron-level scams.

Underlining the potential for scams, Rachel Morris in June 2009’s Mother Jones magazine (here) describes the consequences of the US getting into carbon trading: within 5 years a $2 trillion derivatives market in which carbon credits will be “securitized, derivatized, and speculated by Wall Street like the mortgage-backed securities market.”

These incentives for profiteering will exacerbate the worst aspects of ETSs that are already visible in so-called offset projects.

In such projects, developing nations are becoming a ‘carbon dump’ for the industrialised world, as communal land is enclosed and converted to exotic forestry or occupied by windmills, and as rivers that have been used sustainably by local communities for generations are dammed for hydro schemes. See, for example, Tamra Gilbertson’s devastating photo essay here.

In May 2008, in response to the worsening injustices, 39 climate justice groups published a statement indicting carbon trading and offset schemes as the “false solutions” of “a new 21st century phase of colonialism” (here).

The conclusion is plain enough: we must stand in solidarity with the climate justice movement and oppose false solutions. It’s time to reject the ETS approach and lead the debate toward the real and just answers to climate change.

Hypocrisy and duplicity – The tale of the two Māori Parties

I’ve always (until now) been a defender of the Māori Party, which is understandable because they have more often than any other political party voted the same way as the Greens in Parliament.

But no more! The position they have taken on National’s Emissions Trading Scheme proposal is nothing short of rank hypocrisy and duplicity. Just compare what they said in their Minority Report [PDF, pages 113, 114] in the Emissions Trading Scheme Review Select Committee report with what they have actually signed up to.

What they said:

At a fundamental level, there was opposition to an ETS which allows sectors to pollute and trade up to the Kyoto target, but which does not include incremental emission reduction targets in its design. With the emphasis on trading—establishing and maintaining the conditions for it— the overarching problem of unsustainable economic growth remains unaddressed. More specifically, we opposed the bill because of its relative ineffectiveness and inequalities, including the subsidisation of the nation’s largest polluters at the cost of households and small-medium businesses.

What they did:

Agreed to subsidisation of the nation’s largest polluters to the extent of $1200m annually until 2015, and $800m annually to agriculture thereafter.

What they said:

The Māori Party continues to oppose the introduction of an ETS on these grounds, and would do so more strongly if a replacement scheme were to be less effective and more inequitable.

What they did:

Agreed to an Emissions Trading scheme that is less effective and more inequitable.

What they said:

We also remain deeply concerned about protections in the form of intensity-based allocations and subsidies, which again distort the market model by allowing protected businesses to increase their emissions without penalty, and to be rewarded for it.

What they did:

Agreed to precisely that which they were “deeply concerned” about.

What they said:

For this reason the Māori Party continues to support the introduction of a carbon tax regime as the best mechanism to introduce a price on carbon. A carbon tax is a simpler regime, which provides certainty on price, and as the report notes, it is more stringent than an ETS when set at a sufficiently high rate, and applied to all sectors—incentivising polluters to change without the option of trading their way out and continuing with business-as-usual.

What they did:

Agreed to a weak and ineffective ETS.

What they said:

The Māori Party strongly believes that more needs to be done. Instead of relying on carbon sinks from forestry or buying credits on the international market to achieve our targets, we need to be focused on decreasing domestic emissions. A commitment to prioritise emission reduction will best serve the climate system and protect New Zealand businesses and taxpayers from market uncertainties.

What they did:

Agreed to an ETS that does precisely that, and is unlikely to reduce emissions at all, let alone to even National’s timid 20% or less target.

The carbon trading dilemma

Here’s my thoughts on the Emissions Trading Scheme. I’m not a climate scientist or an economist, so I need to admit that I don’t really get all the technical details of how the scheme should work or what the solutions are to the negotiation impasses that Jeanette seems to have reached this week.

I tend to prefer a trading scheme to a tax because theoretically at least a trading scheme limits the amount of carbon emissions whereas a carbon tax just imposes a cost. A trading scheme also allows for a bit of carrot as well as stick. (It recognises that there are economic opportunities, as well as costs in a low carbon or carbon neutral economy).

That said though the carbon tax vs trading scheme boat sailed long ago taking with it a lot of Labour’s credibility on climate change issues. The current scheme is deeply flawed. If you had to pick two areas of the economy that you could not afford to play pork barrel politics with over climate change they would be transport and agriculture, and yet that is exactly what the government is proposing to do.

The financial assistance for warm dry homes is good and equitable. But it doesn’t overcome the hurdle, in my mind at least, of how you have an effective trading scheme when some people in the scheme are allowed to produce for free and others have a cost imposed.

Imagine a fish trading scheme where the government said a certain amount of fish could be caught and fishers could buy and sell those rights among themselves, but one fishing boat was allowed to ignore the rules and catch as much as it wanted. What would the outcome be?

I think the Greens have got two questions to consider. First the strategic political question – what is it best to do before the election? And the Machiavelli in me says that caucus should vote against the ETS, differentiate itself from flawed Labour greenwash and force all the other parties to come up with a real trading scheme that doesn’t look like it would leak like a sieve.

But the second question is the ethical political one – what decision will be best for the climate? And I guess this turns on two points:

• Is this something on offer better than nothing?
• And can a deeply flawed trading scheme can be amended and improved after the election?

If it is better than nothing, it’s not much better. From National’s policy to date I can’t see them improving the Emissions Trading Scheme in a climate friendly way shortly after the election, especially once Labour has already put something in place allowing them to avoid the political debate. And I can’t see Labour backtracking on their own legislation and admitting they got it wrong either.

Despite that I’m reluctantly leaning towards favouring caucus voting for the ETS. If Pachauri’s timeframe is correct, or even the 100 months one, then we need to act now and then again, rather than instead, immediately after the election. It’s a long shot that we’ll come up with something that will work but the immediacy forces us to give what we have a go now rather than wait another year. So that’s my answer for now, but it doesn’t ‘feel’ right so I’m happy to be convinced otherwise.

Should the Greens support the Government’s ETS?

The Green Party is asking for public feedback on whether it should support or oppose the Government’s proposed greenhouse emissions trading scheme – see Jeanette Fitzsimons’ media release today.

My personal preference is for a simple “carbon” tax on greenhouse gas emissions (including N20, which is not actually a carbon compound).

Failing that, I could live with a strong emissions trading scheme with rapid introduction of transport and agriculture.

The Government’s scheme doesn’t do this, and there seems to have been little progress through negotiations between the Greens and Government in strengthening it.

I don’t agree with Chris Trotter’s analysis. To the contrary, I actually think the Greens could be dumped into the same greenwash bucket as Labour and National and be seen as abandoning their environmental roots if they support an ETS that is ineffective.

Having nothing to differentiate themselves from a weak Labour response to climate change will imo likely cost the Greens votes, rather than gain them.

Sure, Labour may go into “attack advertising” mode agaisnt the Greens, but that actually helped the Greens when National under Shipley did it in 1999. The EB’s effort at the last election was more of a mixed blessing, but I think that also did not do the Greens much harm – maybe cost one seat.

We can always start again after the election, and while I agree that urgent action is necessary on climate change, I don’t think a one year delay in the introduction of an ETS (or even better, a carbon tax, if the Greens can get enough electoral support to get that on the table again) would be particularly significant if we can bring forward the dates that transport and agriculture actually start paying for their emissions.

The other difficulty with supporting a weak ETS is that it is very hard to undo even if the political climate swings in favour of the Greens. People acquire property rights through an ETS, and you can imagine how some of them will bleat if there are future proposals to legislate over those property rights to implement more effective measures to curb greenhouse emissions.

The Greens are seeking feedback on this issue over the next few days. Their caucus needs to make a decision next Tuesday. So post responses here on whether you think the Greens should support the Government’s ETS, but also email them to ets@greens.org.nz.